Apple On A Slippery Slope Down, Shares & iPhone Sales Slump, Jobs Magic Finally Evaporating
The darling of those who prefer a brand over ‘seriously smart’ smartphone technology, Apple, is now facing the real possibility that their once treasured brand is a tad tarnished.
The big question now is what would Steve Jobs have done with some tipping that Tim Cook the current CEO will quit the big US Company next year along with several other senior executives some who worked under Jobs.
News is already out that Apple’s premium iPhone X is set to be canned, their shares are slumping and the big US Company who has a penchant for avoiding paying tax’s is set to have to fork out $21 billion as part of a record-breaking back tax judgment from August 2016.
Apple has agreed to start paying $21bn in back taxes to the Irish government within weeks over what EU competition authorities have said was years of sweetheart tax arrangements that amounted to illegal state aid.
The Financial Times said that although Dublin and Apple still reject the ruling in 2016 by Margrethe Vestager, the EU’s competition commissioner, the agreement to begin payments marks a watershed in the biggest case in a Europe-wide crackdown against the tax practices of American tech companies.
Apple’s repayments will be held in an escrow account while the company and the Irish government continue their appeals in EU courts.
Overnight Apple shares slipped a further 2 percent after falling 7 percent last week, as investors worries intensified about soft demand for iPhones after a warning from several that supplies components for Apple iPhones.
The latest to report soft demand for Apple iPhones is South Korean chipmaker SK Hynix who yesterday said that they expected iPhone demand to stagnate, echoing a similar warning last week from Apple supplier Taiwan Semiconductor Manufacturing.
Concerns ahead of Apple’s quarterly report next week have shaved 9 percent from its stock price in the past five sessions, erasing $80 billion of its stock market value.
Another Company who has issued a warning that sales are down is European chipmaker AMS who admit that half of the Austrian company’s revenue is for Apple smartphones.
GBH analyst Daniel Ives said in a client note that he now expects Apple to ship 212 million iPhones in fiscal 2018, down from a previous estimate of 221 million.
Insiders are tipping that Apple has had to go back to the drawing board in an effort to reinvent their future iPhones. Tens of thousands of previous iPhone owners are now switching to Samsung Android smartphones as they are seen as being “superior” to what Apple is offering up.
Forbes Magazine claimed this week that Apple will have to reinvent the iPhone as right now the company is facing a troubling time. None more so than with the iPhone X, which a leaked report reveals “is dead”.
Neil Campling, co-head at international banking and finance group Mirabaud Securities claims that Apple will not produce a single new iPhone X because it will be cancelled after just one generation and Apple overestimated demand so badly that the company has already made all the units it will need until that end date.
He claims that “The simple problem with X is that it is too expensive,” he said.
Singling out iPhone chip supplier TSMC in particular, Campling said it has been badly burnt by the experience causing inventory stockpiles to hit “record highs”. Mirabaud has tracked TSMC data for over a decade.
Campling notes another iPhone X supplier, Austrian sensor maker AMS, could see its revenues decline up to 35% quarter-on-quarter – almost double the 18% markets had feared – as interest in the smartphone plummets.
Apple is also facing margin pressure with their smartphones which account for more than 60% of all Apple revenues.
Currently Apple is in negotiations with Samsung for lower pricing on the OLED screens the Korean company is making for this year’s iPhones, this comes after Apple tried to cut a cheaper supply deal with LG, only to find that LG was not in a position to deliver production volumes. This led to Apple having to go back cap in hand and plead for lower pricing even though forward production volumes are tipped to be significantly lower than for previous iPhones, Apple is believed to be seeking a reduction from $110 to $100.
The request for price reductions comes as no surprise to the industry as the OLED panel accounts for about one-third of the total production cost of an iPhone X and has been pinpointed as a key factor contributing to the lacklustre sales of Apple’s first OLED model, said the sources.
According to Digitimes reports Apple is likely to purchase up to 100 million OLED panels from Samsung Display in 2018, with 25 million already used in the current iPhone X and the remaining 75 million for the next-generation OLED models to be launched in 2018 – one being a 5.8-inch model and another a 6.5-inch one, indicated the sources.